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Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

June 27, 2007

CAFTA member Honduras slashes minimum wage... in order to compete with low-wage Nicaragua

The National Labor Committee has posted an action alert that shows just how much CAFTA has not lifted all boats, but to the contrary is creating pressures to capsize the whole working class flotilla:

First it was Alcoa workers in Mexico who were pitted against lower wage
Honduran workers. (They were told by Alcoa that they "could hire two
Hondurans for every Mexican.") Now that Alcoa has busted a union
organized at its wire harnessing plant in the El Porvenir Free Trade
Zone in Honduras--immediately firing all 50-plus union leaders and
organizers--local Alcoa management is threatening that if the workers
continue to organize, the plant will be shut down and relocated to
NICARAGUA, where "labor is cheaper and workers don't make so many
demands or cause problems." Alcoa's race to the bottom strategy has
spread from the U.S. to Mexico and now to Central America, where under
CAFTA the workers are being pitted against each other to work for less
and abandon their legal rights...

In a related CAFTA-esque step backward, the Honduran
Government has just reduced the minimum wage in the South of Honduras
(including the department of Santa Barbara) from $178 to $136 a month.
This is a 24 percent drop in wages, from 74 cents an hour to 57 cents.
The largest free trade zone in Central America, the recently completed
Green Valley Industrial Park is conveniently located in Santa Barbara
to access the 57-cent-an-hour wages. San Pedro Sula, where the
majority of the maquila factories are concentrated, is just 20 miles or
so from Santa Barbara. How long will it be before wages drop in the
rest of Honduras? The last time the export factory workers’ wages were at
or lower than 57 cents an hour was 5 years ago. Today's 57 cent an hour
wage is, in terms of real purchasing power, much lower due to inflation.

I will be out of the office and country until Monday, Jan. 4. I will respond to your inquiry when I return. If you need immediate assistance, please contact Travis McArthur at 202-454-5127 or tmcarthur@citizen.org